Looming cuts to Medicare funding for nursing homes has garnered attention from a group of congressional leaders.
Two separate letters penned by 22 senators and 18 members of the house were sent to the Centers for Medicare & Medicaid Services (CMS) late last month, calling on the federal agency to phase-in the proposed $320 million in cuts to the industry.
Specifically, the letter asks CMS to consider a three-year phase-in of the finalized parity adjustment in order to avoid payment reductions in 2023.
The letter paid particular concern for rural facility closures, which authors called a “fate rural America cannot afford,” as well as smaller operators in urban settings which serve communities of color.
“We ask that CMS recognize the sector’s considerable labor and economic challenges as it considers public comment on the proposed parity adjustment,” the letter stated. “We are concerned about the potential risk for significant SNF closures across the country that could reduce access to care for our most vulnerable citizens.”
The letters also noted the impact closures would have on the entire health care system, as beneficiaries are unable to move from acute to post-acute care settings.
The proposed minimum staffing levels for nursing homes was also brought up as well. Members of Congress expressed concern that the mandate is unattainable during the ongoing staffing crisis, as competitors pay significantly higher wages and benefits.
“The SNFs in our communities are already in a precarious state and having an unfunded staffing mandate could cause further closures and those most in need to lose access to needed LTC,” the letter noted.
CMS – in its proposed rule – recommended a 3.9%, or $1.4 billion, payment increase to the industry. The government agency arrived at that number by raising the market basket rate for skilled nursing facilities by 2.8%, a 1.5 percentage point forecast error adjustment and a 0.4-percentage-point multifactor productivity adjustment.
CMS also factored in a proposed downward adjustment to SNF payment rates by 4.6%, or $1.7B, to achieve budget neutrality. This amounts to a decrease of approximately $320 million in Medicare Part A payments to SNFs in FY 23 compared to the prior fiscal year.
The American Health Care Association and National Center for Assisted Living (AHCA/NCAL), in a statement issued Tuesday, agreed that the proposed $330 million cut to Medicare funding would put care access at risk.
AHCA/NCAL CEO and President Mark Parkinson said in a statement that cuts come at a time when the industry is facing an unprecedented workforce shortage and economic crisis: “Sixty percent of nursing homes say their workforce situation has worsened since January, and more than half say they cannot sustain their current operating pace for more than one year.”
“Hundreds of nursing homes across the country have already been forced to permanently close their doors, and the proposed Medicare cuts will put even more facilities in jeopardy of shutting down and displace thousands of seniors,” Parkinson said in the statement. “We look forward to working with the Biden administration and members of Congress to ensure vulnerable seniors have access to the care they need.”
Last July, CMS boosted provider pay by 1.2% and delayed an adjustment to PDPM pay rate changes for at least one year. This was a decrease for fiscal 2022 compared to the agency’s proposed 1.3% boost in April.
CMS has been receiving feedback from the industry during a 60-day comment period following the initial announcement in April; the final rule is expected to be issued this month, with new payments going into effect in October.
